Saturday, December 10, 2005

Though the local economy is humming, Howard County Executive James N. Robey said new revenue will barely cover inflationary costs for next year's budget, and he said he is not ready to consider tax cuts.

"We finished the previous year with a modest surplus. There are those who think there are oodles of money for their projects, but there isn't," Robey told a sparse crowd at his annual budget hearing Wednesday night in the George Howard Building.

The unappropriated surplus is $20.4 million, compared with less than $1 million the previous year. Robey has said $6 million of that is being used to bolster the county's Rainy Day Fund. Officials worry that the rest could be eaten away by a federally mandated accounting change that could force them to begin putting $400 million away for county employees' future retirement health benefits.

"We expect $43 million in new revenues, but built-in ... increases will cost $42 million. We're projecting a very small margin," Robey said.

I'm not terribly suprised, nor am I terribly upset. Unlike others, I'm not yet willing to say our economy is 100 percent back on track (and, no, I'm not blaming Bush). Robey's decision to proceed caustiously and conservatively strikes me as the best approach at this point. Things are looking up, but beneath us, the footing is still fragile.

Meanwhile, gubernatorial candidate Doug Duncan is pushing for tax cuts in Montgomery, a move that is based on politics more than anything else. Also, their situation is very different than ours.

Asked before the meeting about Montgomery County Executive Douglas M. Duncan's proposal Tuesday night to cut property taxes there by 15 percent, Robey said he is not ready to follow suit. Montgomery, he noted, has a 10 percent assessment cap, compared with Howard's 5 percent, which means property tax revenue has been growing faster in Montgomery.

So, let's keep things in perspective for another year. If by that time we've built up some reserves and revenue has continued to increase, then let's talk about tax cuts.